Norwegian retailer XXL ASA, in reporting weak Q4 and FY 2023 results, said it will continue to implement its “Reset & Rethink” strategy this year to deliver Ebitda improvement of 500-750 million Norwegian kroner (€43.9–65.8m) over the next 12 to 18 months. The effort will focus on a continued consolidation of markets and sales channels, an operational exit from Denmark, the shuttering of its mobile app in all markets, and the closing or downsizing select stores.
Low consumer confidence and reduced demand for sporting goods were key contributors to depressed sales for the group in both Q4 and the FY. Final period revenues dipped by 9.5 percent to NOK 2,049 million (€179.8m) and resulted in an Ebitda loss of NOK 13 million and a net loss of NOK 1,017 million (€88.9m). The adjusted net loss was NOK 441 million (€38.7m). Q4 gross margin improved to 33.5 percent without the year-ago inventory write-down of NOK 301 million. XXL also realized NOK 70 million (€6.1m) in positive sales impact from a new provision in its customer-loyalty program.
Full-year revenues declined
The FY23 net loss was NOK 1,629 million (€142.9m), as the Ebit loss came in at NOK 80 million (€7.0m). Full-year revenues declined by 5.5 percent to NOK 7,961 million (€698.6m) from NOK 8,426 million.
Heading into 2024, the company was able to normalize its inventory level through a reduction of approximately NOK 552 million (€48.4m) and strengthen its balance sheet through an extraordinary write-down of NOK 576 million (€50.5m) related to technical goodwill and right-of-use assets. In the area of buying, XXL has restructured its purchasing efforts to focus more on lower-price-point merchandise and greater availability of goods.
XXL said its January 2024 total sales fell to approximately NOK 550 million (€48.3m), but favorable winter weather led to double-digit sales growth in winter categories, such as cross-country and alpine skis, and unspecified gross margin improvement. But limited product availability in key price points coupled with challenged categories, such as home gyms and outdoor equipment, weighed negatively on the monthly sales.
